Flu shot shortage stirs corporate change of heart

Major health insurers reverse course, will cover FluMist spray

Several of the nation's major health insurers reversed course yesterday and will now cover FluMist nasal spray influenza vaccine, and at least two other carriers say they are sticking with last year's decisions to pay for MedImmune Inc.'s innovative inoculation.

Cigna HealthCare, Aetna and Empire Blue Cross Blue Shield all announced that they would cover the FluMist vaccine during the 2004-2005 flu season after British regulators blocked shipment of Chiron Corp.'s flu shot vaccine, cutting off nearly half the U.S. supply.

United HealthCare and WellPoint Health Networks, which had opted to cover Flu- Mist last winter in the face of a far less severe shortage, said they were maintaining coverage for this flu season.

Together these insurers cover tens of millions of members in the U.S. market, but only healthy people ages 5 to 49 can receive FluMist, which is made from a live, modified virus.

"Covering FluMist for [healthy members] from 5 to 49 helps redirect the remaining supply of vaccine shots to people in higher-risk categories," said Lindsay Shearer, spokesperson for Cigna HealthCare, which had more than 10 million members as of June 30.

Aetna has about 13 million members nationwide, while Empire Blue Cross has about 4.9 million, mostly in New York state. WellPoint has about 16 million members.

The insurers' decision combined with the flu shot shortage is expected to spur sales of FluMist and would mark a dramatic reversal from last year, when MedImmune - whose vaccine was priced much higher than conventional flu shots - sold only about 10 percent of its production run.

MedImmune announced on Thursday plans to make nearly 1 million additional doses of its FluMist vaccine, adding to the 1.1 million doses it began shipping yesterday.

The company expects the second batch to reach the marketplace by late next month. Yesterday, Dr. Julie Gerberding, head of the Centers for Disease Control, told a House Government Reform Committee hearing that the center was asking healthy adults to forgo flu shots or to use FluMist if they are between ages 5 and 49.

Dr. James F. Young, president of research and development for MedImmune Inc., told the same panel that incentives were not in place for companies to produce more vaccine. MedImmune, he said, had invested $1 billion in FluMist, only to see it flop. It destroyed the 4 million unused doses last year and scaled back production this flu season.

"How much bigger does this problem need to become?" Young testified. "How many more hearings, analyses, consultants, discussion and testimonies must there be before any action is taken?"

To spur sales this year, MedImmune also slashed its wholesale price by nearly half to $23.50 per dose for doctors who wanted the option of returning unused vaccine for a refund and to $16 for non-returnable doses, making it much more competitive.

The Giant Food supermarket chain will begin offering FluMist in two weeks at about $30 per dose at pharmacies in 34 of its Virginia stores, according to spokesman Barry F. Scher. Last fall, Giant sold FluMist for $59.95 per dose. Giant charges $20 for a flu shot.